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TRADE & INDUSTRIAL POLICY STRATEGIES
LESSONS FROM THE REGIONAL DEVELOPMENT
APPROACH IN THE ATLANTIS, WESTERN CAPE
Georgina Ryan
Paper presented at the first annual
Economies of Regions Learning Network (ERLN) Conference
15-16 October 2015, Pretoria
Trade & Industrial
Policy Strategies (TIPS)
is a research
organisation that
facilitates policy
development and
dialogue across three
focus areas: trade and
industrial policy,
inequality and
economic inclusion,
and sustainable
growth
+27 12 433 9340
www.tips.org.za
Georgina Ryan is a Junior
Researcher, Sustainable
Growth at TIPS
Abstract
This paper explores the role of Special Economic Zone (SEZ) designation in
promoting regional development in the Western Cape. A case study of Atlantis
is used to reflect on lessons in preparing the industrial node for designation as a
greentech hub. It argues that SEZ designation is a useful industrial policy tool
for regional development – a necessary tool; however, it is not sufficient
without supporting measures such regional collaboration and broader industry
support. Prior to SEZ designation, initiatives to advance the green economy in
Atlantis began in 2010, supporting, among others, the manufacturing of
renewable energy technologies. Sufficient market demand has been ensured
through the Renewable Energy Independent Power Producer Procurement
Programme (REIPPPP) and its local content requirements. The SEZ tool serves
as a coordinating mechanism and a means of focusing the efforts in the region
to promote nascent green industries, particularly in renewable energy, and
reposition Atlantis as a destination for green manufacturers. Features such as
the industrial history and recent developments in greentech promotion are
unique to Atlantis and strengthen its case for SEZ readiness. There are,
however, many lessons in preparing the space for designation that can
replicated across the other SEZs in South Africa – particularly around spatial
planning and institutional collaboration to attract investors.
Contents
Executive Summary ....................................................................................................................................... 5
I. Introduction .......................................................................................................................................... 6
2. Latest developments in industrial policy: Special Economic Zones .......................................................... 7
3. Rationale for selecting Atlantis for developing a SEZ ............................................................................... 9
4. The lessons learnt in preparing Atlantis for SEZ designation.................................................................. 12
4. 1 Policy alignment and a focused green economy strategy at provincial level ...................................... 12
4. 2 Institutional arrangements: significant agency by development players ............................................ 13
4. 3 Market dynamics: sufficient demand for renewable energy through national policy ........................ 17
4. 4 Attracting investors: the City creating an enabling environment ........................................................ 18
4. 5 Socio-economic development: skills development ............................................................................. 20
5. Conclusion: Reflecting on lessons from the development approach in Atlantis .................................... 21
Bibliography ................................................................................................................................................ 23
Abbreviations
ASEZ Atlantis Special Economic Zone
CoCT City of Cape Town
CDE Centre for Development and Enterprise
CPUT Cape Peninsula University of Technology
DoE Department of Energy
dti (the) Department of Trade and Industry
ELIDZ East London IDZ
ERLN Economies of Regions Learning Network
IDZ Industrial Development Zone
IPP Independent Power Producer
IRP Integrated Resource Plan
MCEP Manufacturing Competitiveness Enhancement Programme
NDP National Development Plan
NGP New Growth Path
PPP Public-Private Partnership
RBIDZ Richards Bay IDZ
REIPPPP Renewable Energy Independent Power Producer Procurement Programme
SBIDZ Saldanha Bay IDZ
SAREBI South African Renewable Energy Business Incubator
SARETEC South African Renewable Energy Technical Centre
SEDA Small Enterprise Development Agency
SEZ Special Economic Zone
SIPs Strategic Integrated Projects
SMMEs Small, Medium and Micro Enterprises
TISA Trade and Investment South Africa
UCT University of Cape Town
WCG Western Cape Government
WISP Western Cape Industrial Symbiosis
Executive Summary Atlantis is a focus for regional development from all three tiers of government. It was initially developed
as an industrial centre for heavy industry, under the apartheid regime. Since the withdrawal of
incentives in the 1990s many industries and businesses have suffered. Efforts have been made to
promote greentech1 in Atlantis since 2010 and, recently, these efforts have linked to the Department of
Trade and Industry the dti) Special Economic Zone (SEZ) policy. The SEZ policy is designed to support
targeted sectors in specific locations – which is an evolution of the older industrial development zone
policy. Some of the advantages of this new industrial policy instrument include direct support to SEZs,
efficient legal and operational structures and infrastructure provision. Based on a comprehensive
feasibility study conducted in preparation for an application for designation, a number of development
scenarios were considered, and a compelling case for a greentech-focused SEZ has been made. Five
main lessons learnt during the preparation of the application include:
i) Good strategic alignment
There are a number of supportive policy frameworks and positions across the tiers of government
in South Africa. The local and regional governments have each prioritised greentech development.
ii) Strong institutions
The project management office through GreenCape played a central role in coordinating. This is
highlighted as a key driver. One section, WISP (Western Cape Industrial Symbiosis) is already
being replicated in KwaZulu-Natal and Gauteng can be considered as an example of this value.
iii) Excellent underlying economic case
The economic fundamentals in Atlantis and for greentech in South Africa are strong. There is a
thriving renewable energy industry and huge opportunity in the build environment, waste, water
and energy sectors.
iv) Bespoke investment support
The City of Cape Town has, with its partner GreenCape, understood the requirements of
greentech. It has proactively earmarked, permitted and fast-tracked land disposal in Atlantis.
Understanding the constraints faced by business and relieving them is bespoke investment
support. For example, building plan approval in Atlantis takes five days.
v) Targeted skill audit and intervention
Atlantis is an existing industrial area. A targeted skills intervention to simultaneously upskill the
workforce and introduce new training opportunities will ensure an appropriately skilled
workforce.
1 Greentech should be understood as technologies that limit or prevent harm to the natural environment relative to
conventional alternatives. Greentech involves technologies that are less polluting, use natural resources in a more sustainable manner, entail the recycling of their waste and products and the handling of their residual wastes in a more acceptable manner. Greentech is not only individual technologies but refers to the total system around green technologies that include know-how, procedures, goods and services, equipment, and organisational and managerial procedures.
The Atlantis SEZ has given itself an opportunity to succeed, and while it is premature to predict success,
the ingredients and evidence are already there. Investments such as the GRI Renewable Industries wind
facility of R300 million can act as anchor tenants in the zone. The work on industrial symbiosis, skills,
investment promotion coupled with a provincial agency focused on the sector, political will and a
market imperative provide an opportunity for this industrial development strategy to work. Many of the
lessons from the Atlantis SEZ can be shared and translated to other regions and programmes.
I. Introduction
Industrial policy instruments are important tools for economic development in South Africa, especially
for development at the regional and sub-national level. Linking urban and rural spaces has become a
challenge in the country, exacerbated by persistent poverty, unemployment and inequality. Support to
industry, particularly in the manufacturing sector, results in multiplier effects – economic growth and
job opportunities through the backward and forward linkages in the economy. To ensure sustainable
development at the sub-national level, it is vital that targeted industrial policy be considered to provide
the industrial and economic base for development, and to serve as a tool for regional development. One
such industrial policy instrument is the Special Economic Zones. This paper explores the theory and
practice of SEZs through a case study of the proposed designation of Atlantis in the Western Cape
Province of South Africa.
A number of other development efforts have come before the application for SEZ designation, which
have also helped position Atlantis in current industrial development plans. These include provincial and
local initiatives as early as 2010 to promote greentech in Atlantis and positioning the town as a
greentech hub for manufacturers, through a revitalisation effort to re-establish Atlantis as an industrial
node near Cape Town. These initiatives are well aligned to national green economy aspirations, and the
provincial green economy strategy. They respond to the efforts to promote renewable energy in South
Africa and local manufacturing for this sector. This paper investigates the role of SEZ designation as an
industrial policy tool for the regional development of Atlantis as this greentech hub.
The case study methodology used incorporates a desktop study on SEZs and green industrial
development, a literature review and semi-structured interviews with key institutional stakeholders in
the Atlantis SEZ (ASEZ). It was developed with the support of GreenCape, the project management office
for the ASEZ, and reflects on the practical considerations for greentech in Atlantis and South Africa’s
SEZs.
The paper is structured in three main parts. Part one provides a background note on South Africa’s SEZ
policy and the development history of Atlantis. Part two discusses the key lessons coming from Atlantis
as a greentech hub. Part three reflects on what this case study means for developing green SEZs,
providing a summary of the findings and recommendations, followed by concluding remarks.
2. Latest developments in industrial policy: Special Economic Zones A SEZ policy has been promoted by the dti as an enhancement of its approach to Industrial Development
Zones (IDZs). SEZs are defined as a “geographically designated areas of a country set aside for
specifically targeted economic activities, supported through special arrangements (that may include
laws) and systems that are often different from those that apply in the rest of the country” (the dti,
n.d.). A SEZ serves as “an economic development tool to promote national economic growth and
exports by using targeted support measures to attract foreign and domestic investments and
technology” (the dti, 2012). The most recent iteration of the policy in the form of the Special Economic
Zones Act No. 16 of 2014 plans to support the development and designation of 10 new SEZs in addition
to existing IDZs, as part of the broad industrial policy strategy to promote regional development and
support to industries for economic development. Between 2002-2015, six IDZs were designated and the
dti has spent R7. 2 billion developing and supporting these IDZs (the dti, n.d.).
The current SEZ policy in South Africa builds on lessons learnt from developing IDZs since 2000. IDZs
were initiated to tackle the post-apartheid challenge of increasing foreign direct investment and
accelerating economic growth, while also addressing the narrow range of exports and a dependence on
primary production. They are “purpose-built industrial estates, linked to an international port or airport,
specifically designated for new investment in export-oriented industries and related services”
(the dti, n.d.). In terms of the jobs created in the country’s IDZs, it is estimated over the 10-year period
(2002-2012) that 73 000 jobs were created – 8 500 (11. 6%) were direct jobs and 64 500 (88. 3%)
construction and indirect jobs (the dti, 2014). Between the 2002/03 and 2013/14 financial years, the dti
spent a total of R6. 9 billion in the four operational IDZs, namely the Coega IDZ, East London IDZ (ELIDZ),
Richards Bay IDZ (RBIDZ) and the Saldanha Bay IDZ (SBIDZ).
These funds were for infrastructure and operational expenditure needed for effective operations and
investment attraction. Coega received 67%, ELIDZ 22%, RBIDZ 7% and SBIDZ 3% of these funds (the
dti, 2014). In terms of occupation rates, the uptake of land in the IDZs has been slow, with Coega IDZ
having 35% land occupied, ELIDZ 31% and RBIDZ 35%. Export sales from the IDZs have been far below
expectation over the same period (2002-2012), with export sales by two enterprises located in Coega
and one in RBIDZ totaled just more than R2. 7 billion (the dti, 2014). Based on a review of the
performance of these IDZs, the South African government agrees that IDZs have not delivered on
expected results, with low investment levels, not enough jobs created and simple relocation of
businesses (the dti, 2014).
The main problems with IDZs were a weak policy and legislative framework; poor institutional and
governance arrangements; ad hoc funding arrangements that render long-term planning in the IDZ
impossible; the lack of IDZ specific incentives; the lack of targeted investment promotion; the lack of
programme definition and strategic direction; and poor coordination and integration. These issues have
led to the poor performance of the country’s IDZs (the dti, 2012). Remedies for this poor performance
take the form of a more rigorous and streamlined processes, developed to ensure a smooth
implementation process with the new SEZ Act. The 2013/14 financial year also marked a transition
process for the IDZ funding model to an SEZ model, in which improved cooperative governance is being
introduced. Provincial and local governments are positioned as the licensee holders and asset managers
which are responsible for the operational expenses of the SEZs. It is also likely that the five existing IDZs
will become SEZs (the dti, 2012).
In addition to needing to improve IDZs, there are a number of reasons for the dti to promote the SEZ
concept. First, SEZs target broader regional development and not only the establishment of industrial
zones at ports or airports. Second, SEZs are also internationally recognised as a tool for industrial
development with examples and lessons from international best practice (the dti, 2012). The objectives
of SEZs, as outlined in the SEZ Act, include facilitating the creation of an industrial complex with strategic
national economic advantage; attracting foreign and domestic direct investment; enabling the
beneficiation of mineral and natural resources; promoting the integration with local industry (through
clustering) and increasing value added production; creating decent work and other economic and social
benefits in the region in which they are located; broadening economic participation by promoting small,
medium and micro enterprises (SMMEs) and co-operatives; and promoting skills and technology transfer
(the dti, 2012).
Furthermore, two overarching principles guide the formation of new SEZs in the country: regional
integration and customisation. Regional integration is promoted through the creation of backward and
forward linkages with the regional economy. Customisation is achieved by having different types of SEZ,
which include free ports, free trade zones, industrial development zones, and sector development in
SEZs. The variety of SEZs allow for targeted support for industrial development appropriate for the area
of designation and the sectors chosen, which is a more flexible model that the IDZs. Figure 1 indicates
the geographic location of existing IDZs and proposed SEZs.
Figure 1: Location of potential SEZs and existing IDZs
Source: (ERLN, 2014)
SEZs benefit from specific incentives: a reduced corporate tax of 15%; a building tax allowance; an
employment tax incentive; and other tax allowances. SEZs also are duty free Customs Controlled Areas
with VAT exemption. Enhanced funding is moreover made available through a dedicated SEZ Fund and
public-private partnership (PPP) arrangements. The provisions include bulk infrastructure, support for
skills and supplier development to local businesses. Most importantly, a one-stop-shop model is at the
centre of the SEZ policy, promoting a single point of contact to reduce bureaucracy, simplify government
approvals and applications processes, and provide investor after-care services. The successful
implementation of an SEZ is often measured by the investments it attracts, the new businesses created
and jobs resulting from these. Additional factors of success should include the level of institutional
capacity and coordination to ensure the long-term sustainability of the SEZ and ultimately development
outcomes from the SEZ, particularly as it relates to the plans and vision for the region.
The dti (2015) reports that the implementation of the SEZ legislation is at an advanced stage and that
cluster investors with an investment value of more than R100 billion have made non-binding
commitments to locate into proposed SEZs. Pipeline investors for the SEZs include metallurgical
investments of R36 billion in Musina (Limpopo); a US$5 billion (R70 billion) investment for a steel plant
in Middelburg (Mpumalanga) or Richards Bay (KwaZulu-Natal)); US$100 million (R1. 4 billion) for fuel
cells in Ekhuruleni (Gauteng); R800 million for aircraft maintenance and repair in Upington (Northern
Cape); and R8 billion for the construction of a rail-based container, auto value chain, medical
equipment, manufacturing of a new jet aircraft, agro-processing, gas electricity generation, logistics and
oil blending, and related sectors for the already designated Maluti-a-Phusong (Free State) (the dti,
2015).
3. Rationale for selecting Atlantis for developing a SEZ
Atlantis is an industrial town 40km north of Cape Town which was historically developed for weapons
manufacturing and heavy industry from the 1970s-1990s. It is part of the City of Cape Town (CoCT)
metropolitan municipality and as of 2011 is home to 67 491 residents. According to the 2011 Census,
the demographic of Atlantis is 85% Coloured, 12.9% Black African, 0.4% Indian/Asian, 0.1% white and
1.6% other. A total of 79.5% of Atlantis residents are Afrikaans speaking, 9.4% English, 7.7% Xhosa and
3.4% other. The significance of developing the Atlantis SEZ relates not only to its potential as a
greentech hub, but also to its historical spatial disconnect from the City of Cape Town and the Western
Cape region. It was also a place of racial segregation under the Group Areas Act, created specifically for
the coloured community. With industrial incentive support from government in the 1980s, about 50
industrialists in Atlantis were employing people drawn from nearly 8 000 households. These incentives
were withdrawn in the 1990s and Atlantis suffered economic decline. It is characterised today by low
employment, and by implication high unemployment (only 73% of the total working age population is
employed) and social problems (in addition to poverty, drug abuse and a predominance of gangs are
present in Atlantis) (Census, 2011).
The timeline in Figure 2 captures some of the key developments in Atlantis from the 1970s until 2015,
showing the peak of manufacturing performance in the 1980s. The timeline shows some of the large
divestments (Tedelex) and investments (Hisense and GRI) in the area.
Figure 2: Timeline of developments in Atlantis: 1970s-2015
Source: Adapted from the Atlantis SEZ prefeasibility study, Deloitte 2014
A number of large manufacturers, such as the Atlantis Foundries, remain in Atlantis. New businesses,
such as the Hisense electronics factory established in 2013, have created an additional 300 jobs.
Initiatives, such as the Atlantis Revitalisation Framework, the greentech hub and the SEZ designation,
are focused on reviving industry in the region and finding better ways of connecting Atlantis within the
Western Cape region. In addition, a SEZ in Atlantis would form part of an existing, serviced industrial
area with most of the overarching spatial requirements for the initiative already in place. With the
spatial planning for Atlantis, a broad range of provincial and municipal policies and planning frameworks
support the focus and spatial location of the proposed Atlantis SEZ. These include, among others, the
provincial government infrastructure framework and economic framework; city spatial planning and
development plans; and the targeted Revitalization Framework and SEZ application. These are
summarised in Appendix B.
The rationale for positioning Atlantis as a greentech hub is based on four key points. The first is that
there is sufficient market demand to sustain a small-scale greentech sector, based mainly on the
development of the renewable energy sector of South Africa. There are also significant job creation
opportunities in other green economy sectors, such as the waste sector, for the Atlantis area. Second,
the economic fundamentals for greentech in Atlantis are in place. These relate not only to the demand
factors for greentech but the opportunity for green manufacturers to become suppliers to the greentech
sector.
There is sufficient available land in the area for the new businesses to be established. Most of the land is
already industrially zoned and two sites have been prepared by the City of Cape Town specifically for
greentech companies. Third, a large source of labour for manufacturing industries resides in and around
the Atlantis industrial area. Lastly, the location of Atlantis is strategic, near to industrial freight centres
within the Cape Town metropolitan area and well integrated with regional freight movement networks.
Situated near the Cape Town Central Business District, Atlantis is also 76km south of Saldanha port and
lies between two major roads, the N7 route to Namibia and the R27 West Coast road.
Atlantis has already begun to gain traction in the renewable energy space with its first large investor
established in 2014. GRI Renewable Industries, a Spanish wind tower manufacturer, purchased a 7ha
site from the City of Cape Town to develop a R300 million manufacturing facility. The investment was
the result of collaboration among investment promotion agencies, a development agency and national,
local and provincial government. The process to acquire this land also set Atlantis above other
prospective sites such as locating in Saldanha. As an anchor tenant in the greentech hub, GRI
manufactures wind towers, supplying projects in the REIPPP and has created 220 jobs. Under
conservative estimates, the SEZ could attract 12 firms in its first three years and eight more in the
following years, securing investments of over R500 million from foreign and domestic investors. These
types of investments and support to domestic business and SMMEs will result in ASEZ creating between
1 060 and 1 440 jobs in the short to medium term. The SEZ instrument serves as a coordinating tool for
attracting investment and supporting industrial development through a focus on manufacturing for the
greentech sector.
Preparations for establishing Atlantis as an SEZ have involved extensive prefeasibility and feasibility
studies commissioned by the dti. The application for designation was developed by the sector
development agency and ASEZ project office, GreenCape, in partnership with the Western Cape
Government and the application for designation was submitted by the provincial government in
September 2015. In addition to the feasibility studies, GreenCape commissioned additional economic
research (particularly on understanding job creation potential and associated costs) and has initiated a
number of green sector related projects in and around Atlantis and province wide that would further
inform and support the development of the SEZ (Mulcahy and Rice, 2015).
The SEZ brings an incentive structure and industrial support system for focussed investment and
development of greentech in Atlantis; and serves as a focal point for attracting specific greentech
manufacturers to the region. Establishing a SEZ also provides the necessary expertise and support for
businesses seeking to establish themselves in Atlantis, ultimately connecting the region to the economy.
There is one other green SEZ considered for the country. This SEZ would be for the solar industry and
located in Upington in the Northern Cape Province, where most of the solar REIPPPP projects have been
awarded. This study does not compare the developments of the Upington SEZ. Further research to
compare the SEZ planning and implementation of this SEZ would be valuable for the greentech and
renewable energy industries of the country.
4. The lessons learnt in preparing Atlantis for SEZ designation
Based on the rationale for establishing a SEZ in Atlantis, a number of lessons can be learnt from the
approach taken to its development. This paper highlights the unique features of the experience in
Atlantis and reflects on the key factors of success for SEZs; as well as the innovations that characterise
the ASEZ.
The lessons discussed in this paper reflect on a set of basic criteria that should be met for successful
regional development using SEZs. These criteria are not exhaustive but provides a framework for SEZs in
South Africa. Based on the policy development of these zones (the dti, 2012) and the need to deepen
regional development, the criteria for SEZs includes, among others, sound market fundamentals (ie.
sufficient demand and supply for the proposed product of the SEZ), adequate infrastructure, the
potential to create jobs, strong capacity to deliver the offering of the SEZ and the necessary governance
structure to run the SEZ. Ultimately a successful SEZ will attract investments and productive firms,
resulting in economic growth and job creation as key indicators of success in an SEZ. In the case of the
Atlantis SEZ, the lessons explored demonstrate how the ASEZ meets these basic criteria. In many
instances a number of innovations around these criteria are also evident.
4. 1 Policy alignment and a focused green economy strategy at provincial level
Where there is policy alignment (particularly with industrial and economic policy) of activities proposed
for an SEZ, broader support for developing the region is likely, based on its linkage to these policies and
priorities. This lesson highlights the alignment of Atlantis’s strategy for greentech development with a
number of national and sectoral policies, which include national development and economic policies
(the National Development Plan (NDP) and the New Growth Path (NGP)), green economy objectives,
energy policy and industrial development, as well as spatial and development policies for Atlantis.
Details of the relevant policies for Atlantis and the green SEZ are captured in Annex A.
There is a unique convergence of relevant policy spheres in the case of Atlantis, summarised in Figure 3.
The main innovation within the policy context has been the linkage between national green economy
policy, provincial strategy and the decision to promote Atlantis as a greentech hub. This is captured in
the green economy strategy developed at a provincial level – known as the Green is Smart strategy for
the Western Cape (WCG, 2013) – which is identified as the main driver for greentech in Atlantis. Such a
strategy is a useful tool for provincial advancement of the green economy and could potentially be
replicated by other provinces, as is the case in Gauteng and Kwazulu-Natal, which have both developed
provincial green economy strategies. For regional development in particular, the role of policy alignment
is important in providing a broader vision and development framework for the area. In Atlantis, this
green economy alignment lends itself to a longer-term vision for the region, which strengthens the
rationale for targeting greentech manufacturers to locate to the industrial area.
Figure 3: The convergence of policy relevant to developments in Atlantis
Source: Author, 2015
The innovation in this context is the strategic approach by the provincial government to unlocking green
economy opportunities in the region through its Green is Smart strategic framework (WCG, 2013). The
green strategy of the province was used to identify Atlantis as a place to advance a greentech hub. The
strategy has provided the vision and direction for the green economy in the Western Cape, and also
gives the necessary institutional support and capacity to implement the plans for the green economy in
the region. Having a targeted focus on the green economy, aligned to both national and regional
policies, further enforces the rationale to develop programmes and activities that capture the green
opportunities in the region. The SEZ for Atlantis thus builds on this policy alignment and deepens the
industrial development aspects of the greentech aspirations for Atlantis.
4. 2 Institutional arrangements: significant agency by development players
Strong institutions and collaboration and partnerships among the institutions for an SEZ are vital for
both its establishment and its sustainability. Without the appropriate skills, capacity and networks to
drive the vision and strategy for a SEZ, unlocking the industrial and economic opportunities of a region
would be particularly challenging. While the economic/market case for developing a SEZ is fundamental
to positioning such a zone, the institutional arrangements are also a key ingredient for realising its
potential.
The institutional developments for the Atlantis SEZ provide a compelling example of success in
establishing the right institutions and partnerships. In this lesson, the role of sector development
agency, GreenCape, is highlighted as the main driver of developments for both the greentech hub and
the Atlantis SEZ. Significant agency (and capacity to drive projects) is demonstrated in the role
GreenCape has played both in the SEZ preparation and the green economy agenda for the province. In
this section, one project in particular, namely WISP, should be considered the agency’s greatest
innovation; and is already being replicated in other regions such as Gauteng and Kwazulu-Natal. The
strength of the institutional capacity and its partnerships to deliver on a SEZ model is very important for
ASEZ. These partnerships and programmes will strengthen the regional impact of developments in
Atlantis. And through the SEZ, there is a mechanism for focusing activities and prioritising the green
economy support to manufacturers in Atlantis.
The main institutional players in Atlantis are the provincial government (Western Cape Government,
WGC), the municipality (CoCT), the investment promotion agency, Wesgro, the Atlantis Investment
Facilitation Office (the investment promotion arm of the City located in the heart of industrial Atlantis),
and the sector development agency, GreenCape. Entities operating in Atlantis include businesses and
business associates as well as business incubators. Academia and training institutions include the
University of Cape Town (UCT), the Cape Peninsula University of Technology (CPUT) and other training
colleges as well as the newly established South African Renewable Energy Technical Centre (SARETEC).
In addition, there are civil society organisations and NGOs (such as the WWF) that are included in the
broader partnership network of GreenCape, whose work is relevant for the Atlantis SEZ. Furthermore,
the dti has also provided support in developing feasibility studies and preparation work for designating
the Atlantis SEZ. This lesson looks at the contribution of the institutions in promoting greentech in
Atlantis and looks at their operation in the proposed SEZ. Figure 4 captures these key players for the
SEZ.
Figure 4: Institutional arrangements
Source: Author, 2015
The provincial (WCG) and municipal government entities (CoCT) have created the enabling environment
and support for attracting significant investment into Atlantis. The provincial and local governments
have also had a role in the SEZ designation, and have been key in developing and promoting the SEZ
application. The process that GreenCape has initiated for Atlantis to be designated as an SEZ was to
develop a case for the designation, gain approval from the WCG and CoCT, apply for designation and
then create an entity to run the SEZ (Mulcahy and Rice, 2015). In establishing the case for SEZ
designation, a prefeasibility and feasibility study as well as a business plan were developed for the
Atlantis SEZ. The approval from provincial and local authorities was gained through a Western Cape
Government cabinet endorsement of the findings of the feasibility study and a City of Cape Town council
resolution to support the initiative. This was followed by the Western Cape Government submitting the
application for designation to the Minster of Trade and Industry in September 2015. The evaluation
stage of the application is scheduled to take six months. In the meantime, GreenCape has initiated the
consultation and investigation into understanding the most appropriate entity for the SEZ management.
In addition to government (national and provincial) advancing the SEZ programme, investment
promotion agencies play a role in facilitating investment deals into Atlantis. These institutions include
the Atlantis Investment Facilitation Office, which forms part of the City of Cape Town, as well as the
larger investment promotion agencies, Wesgro and Trade and Investment South Africa (TISA) (a branch
of the dti). The GRI investment (Kolver, 2014) was the result of a major collaborative effort by
GreenCape, the City of Cape Town, TISA and the Western Cape Government (Deloitte, 2014). The role of
the development agency reflects the operation the proposed one-stop-shop model required for the SEZ
(the dti, 2012), and has already demonstrated an ability to attract investors, in its involvement with the
GRI investment and also in its role in attracting other manufacturers such as SMA Solar Technology and
Jinko Solar (Deloitte, 2014).
Bringing new greentech business to Atlantis is the fundamental rationale for the SEZ. However, effort
needs to be made to retain and grow businesses in Atlantis, which encompasses both long-standing
legacy businesses and newer entrants. They include large industry such as the Atlantis Foundries,
Wheatbix, Hisense (established in 2013) and other manufacturers. A study was conducted as part of the
feasibility study to understand existing businesses and new business demand in Atlantis (Deloitte, 2014).
This topic is explored in more detail in Section 4. 4. Industrial businesses are the lifeblood of Atlantis and
form the backbone of developments in the area. These businesses are represented by associations, such
as the Atlantis Industrial Initiative, Business Western Cape, Black Management Forum, and the Cape
Chamber of Commerce.
In Atlantis, small and medium businesses are also an integral part of creating targeted industrial clusters
and value chains. In and around Atlantis, SMMEs are supported by incubators, such as SAREBI (South
African Renewable Energy Business Incubator). SAREBI, funded by the CoCT and the dti through the
Small Enterprise Development Agency (SEDA), provides business support, facilitation of access to
markets, and access to finance for SMMEs in the renewable energy sector. It identifies candidates for
incubation and successful candidates are located within the SAREBI facilities, on site in Atlantis, to grow
and support their businesses. It is envisaged that SAREBI will be a feeder for both upstream and
downstream opportunities in the Atlantis SEZ.
While supporting businesses to grow and thrive in Atlantis, there is also a great need to address skills
development as part of the ASEZ development. Organisations that play an important role in promoting
skills development are the FET colleges and other institutions such as the University of Cape Town, the
Cape Peninsula University of Technology, the Stellenbosch University and SARETEC. GreenCape has
undertaken a high-level skills audit of Atlantis which is discussed in more detail in Section 4. 5. In
addition; NGOs such as WWF-South Africa have also provided support to the developments in Atlantis,
particularly to GreenCape.
One of the unique features in the institutional landscape of the development of the SEZ for Atlantis is
the role of GreenCape. It was established as a non-profit company and sector development agency in
November 2010 by the Western Cape Provincial Government and the City of Cape Town. Its mandate is
to unlock the manufacturing and employment potential in the green economy of the Western Cape. It
then became the project management office for the application for the designation of Atlantis.
GreenCape has been the driving agent of the activities to coordinate the application for Atlantis to be
designated as a SEZ, serving as a single contact point for investors. It has also set up a number of
projects and supporting strategies beyond the SEZ, facilitating skills development and collaboration
among firms, providing energy management services and many other sector specific support
programmes in energy, waste and water. In Atlantis in particular, GreenCape has worked with the
existing Atlantis Industrial Initiative to understand the major concerns facing business. For the purpose
of regional development, the role of such an agency should not be underestimated. Capacitated to work
in many areas of the green economy, the GreenCape team has delivered projects across a number of
areas. One of the most successful programmes of GreenCape is WISP. The industrial symbiosis
programme uses a unique methodology to establish matches between companies’ resources and their
needs, with waste products understood to be resources. Industrial symbiosis is the sharing of services,
utility, and by-product resources among industries in order to add value, reduce costs and improve the
environment.
In the context of Atlantis and the SEZ development, a programme of this nature is precisely the type of
tool that deepens understanding and collaboration among firms, unpacking their resource use and
maximising the efficiencies for firms through a novel approach that transforms one company’s waste
into another company’s resource. In the WISP session focused on Atlantis in 2015, 35 companies
participated and 194 resources were discussed with 561 matches and potential synergies emerging.
About 77 companies have been identified in the Atlantis area, with 36 now signed up to the WISP
project (Mulcahy and Rice, 2015).
Between 2012-2015 the WISP success included landfill diversion of roughly 803 tonnes, saving a total
value of R5.2 million and created additional revenue of R4.3 million. The CO2 emissions saving from
WISP stands at 3 000 tonnes; and overall the project created 12 permanent jobs, 14 temporary jobs, five
indirect as well as five induced jobs – notably one of the most cost-effective programmes for creating
jobs in the economy. This project is a real innovation, creating value for companies. In 2015, WISP was
nominated for a Circular Economy award at the World Economic Forum in Davos. It is certainly one of
the most replicable projects across the country and is particularly useful for green industrial
development (Mulcahy and Rice, 2015).
This lesson demonstrates the role and contribution of various stakeholders in promoting green economy
activities in and around Atlantis. The green economy is also an emerging concept in South Africa with
great potential for new businesses to be created. In terms of regional development, this is a reason for
the SEZ in Atlantis to serve as a coordinating and supporting mechanism to develop these nascent
industries. The SEZ offers the potential to transform existing business in the area with the potential to
produce goods and services for the greentech sector as well. In the case of Atlantis, the advantage of a
sector development agency is its ability to provide specialist skill and knowledge to support greentech
developments. The primary focus of SEZ designation is around creating an enabling environment for
these businesses. A factor in coordinating and unlocking the market potential for a region lies in the
institutional arrangements enabling this. In the case of Atlantis, this is a benefit brought by the sector
development agency, GreenCape. The role of a focused agency supporting businesses in the SEZ is the
function of the one-stop-shop model that GreenCape is already demonstrated in its ability to attract
large investors such as GRI to Atlantis. The role of such agencies in supporting designation is replicable in
different areas, depending on the planned SEZ and the requirements. The benefit of an existing agency
is the track record and experience in assisting a sector and the institutional capacity in delivering
projects to support the SEZ.
4. 3 Market dynamics: sufficient demand for renewable energy through national policy
A crucial factor in the success of a SEZ and the fundamental starting point for designation is the
determination of sufficient market demand for the development of a sector or cluster such as the
greentech ambitions for Atlantis. The REIPPPP in particular has shaped market demand in the renewable
energy sector in South Africa. Since 2011, the programme has introduced 92 independent power
producers (IPPs) which will contribute in excess of 6,327 MW of renewable energy to the Eskom grid
(DoE, 2015). In additional there have been ministerial determinations for renewable energy
procurement. Three Ministerial Determinations for the procurement of 3,725MW by 2016, 3,200MW by
2020 and 6,300MW by 2025 have been issued. And the allocated quantities derived from the Integrated
Resource Plan (IRP) 2010-2030 target of 17,800MW new generation capacity set aside for renewables
(DoE, 2015). Manufacturing for this renewable energy sector will be an important industrial
development focus related to the REIPPP, which is driven by programme requirements for local content.
The wind energy sector in particular is a focus for the Atlantis SEZ due to its proximity to wind project
sites in the region. With a second green SEZ considered for solar technologies in the Northern Cape (the
dti, 2015), the SEZ instrument is an important tool for supporting the industrial development of the
renewable energy and green tech sectors.
The market potential for greentech in Atlantis is sufficient to warrant the designation of an SEZ to attract
investors and develop the domestic industry (Deloitte, 2014). The SEZ will function as a coordinating
mechanism for these greentech development efforts, providing tangible incentives to attract investors.
The market fundamentals for the renewable energy sector have been driven at a national level by the
REIPPPP. The REIPPPP established the certainty in the market, both in the allocation of renewable
energy generation capacity as well as the financial backing by National Treasury in Eskom’s deal to
procure energy from IPPs (Montmasson-Clair and Ryan, 2014). The innovation of the REIPPP for South
Africa is that it holds the potential to unlock and promote the local renewable energy market. It could
even be replicated for other public-private-partnerships (PPPs) in the country, and is being considered as
part of procurement for gas in South Africa (DoE, 2015). The SEZ thus leverages and deepens the
positive impact of the renewable energy procurement programme by embedding the procurement of
renewable energy goods (the wind towers in particular) from local manufacturers.
Plans to promote greentech in the Western Cape started as early as 2010/2011 with the Western Cape
Government Department of Economic Development and Tourism beginning to develop plans to
establish a clean technology manufacturing hub in Atlantis. This was sparked by the local procurement
requirements associated with the REIPPPP. The national policy directing the allocation of renewable
energy in the country’s electricity mix and the procurement programme for renewable energy have
been vital to unlocking sufficient demand for renewable energy technologies in South Africa. Most of
the current opportunities lie within the REIPPP. Additional renewable energy determinations by the
minister and plans for new build project in renewables will be key to continuing the demand for
renewable energy in the country.
The most relevant renewable sector for Atlantis (due to its proximity to REIPPPP project sites) is the
wind industry (Deloitte, 2014). The potential to manufacture for the wind industry and localise
manufacturing has been explored by the dti in the 2014 wind localisation roadmap (Urban-Econ, 2015).
Other opportunities for production in the greentech space include wind blade and tower manufactures,
photovoltaic manufacturers, inverter manufactures and smart meter manufacturers (Deloitte, 2014).
Estimates of market size for the green economy in the Western Cape stand at R4 billion by 2019 across
energy and waste sectors, such as large-scale renewable energy utilities, waste recycling and energy
efficiency. Utility scale renewable energy, predominantly development, installation, operations and
maintenance, constitutes more than half the market size for these opportunities. In contrast, job
opportunities estimates are around 6 300, with over 4 000 of these specifically in the waste sector. The
greatest growth potential nevertheless lies in the renewable energy sector. The five-year forecast
between 2014 and 2019 estimates opportunities to grow to a potential market size of R20 billion. The
other sectors that also show growth potential are the energy efficiency market, built environment,
recycling and biofuels. The other job opportunities for the same period would be 18 600, with up to
6 000 potential jobs in the waste recycling sector. (Deloitte, 2014)
The market dynamics for an industry and the considerations for industrial development in a region go
hand in hand. A clear business case for greentech in Atlantis is a requirement for designation. It will be
important that continued market and economic research be conducted to support developments in the
region. Through the SEZ, this type of research and analysis will continue and be used to target the right
companies for the ASEZ. This type of support and ongoing market research is replicable and necessary
across proposed SEZs in various sectors.
4. 4 Attracting investors: the City creating an enabling environment
Sufficient market demand and sound market dynamics are the prerequisite for attracting the right
investors into a SEZ. Without the additional incentives that the SEZ offers, the factors that make Atlantis
attractive to investors are related to the sites and infrastructure of the industrial area as well as its
strategic location and its large labour market. The SEZ designation will bring additional tax incentives
and support to businesses in Atlantis.
There are also other incentives in place both nationally and locally. The City of Cape Town provides
financial and non-financial incentives and a set of the dti’s incentives (Manufacturing Competitiveness
Enhancement Programme (MCEP), 12I and 12L) also apply to green manufacturing.
The main innovation in this lesson is the City of Cape Town’s role in promoting the ease of doing
business by ensuring the development readiness of sites earmarked for greentech companies in Atlantis.
This process has been accomplished within the bounds of the interpretation of the Municipal Finance
Management Act No. 56 of 2003. The collaboration and prioritisation of the ease of doing business is a
lesson replicable in many other SEZs, and is one way of fast-tracking applications and procedures for
businesses to start operation.
In December 2011, the CoCT Council approved a land release procedure to promote greentech in
Atlantis, which entailed the allocation of land for release through an accelerated land disposal process
(Deloitte, 2014). Two vacant portions of undeveloped land (approximately 29ha and 38ha respectively)
within the existing Atlantis industrial area were allocated by the City for this fast-tracked land disposal
process. The environmental impact assessments for these parcels of land have also been conducted and
approved. The availability of this land was a key determinant in the success of attracting one of the first
large greentech investors to Atlantis (Mulcahy and Rice, 2015). In comparison to several potential
development sites, the accelerated land disposal policy raised Atlantis’s overall attractiveness for GRI in
particular. The Spanish wind tower manufacturer purchased 7. 8 ha from the City for the development
of a 17 000 m2 facility. The company applied to purchase the land in December 2013, broke ground in
February 2014 and launched full operations in November 2014. With the capacity to produce 150
standard steel masts per year, the company has created 220 jobs and is producing wind towers for
projects of the REIPPPP (Creamer, 2014).
Much of the proposed space for the Atlantis SEZ is already zoned for industrial purposes. It is also
serviced and has links to major roads. Since Atlantis was originally designed and planned for industrial
purposes, the land use provisions and infrastructure are well suited for industrial development. The full
extent of the serviced industrial area in Atlantis is four million m2 with adequate bulk infrastructure.
According to feasibility studies for the SEZ (Deloitte, 2014), this includes bulk water, waste water and
storm water infrastructure. The regional landfill sites also cater for a range of waste classifications and
are located near Atlantis. In terms of electricity availability, the two sites identified have 4 MVA
electricity available, connect to the national grid, sufficient for the 2014-2017 period. If these sites are
taken up by manufacturers, between 2018-2030 an additional 1 MVA upgrade would have to be added
to the electricity supply, which is catered for in the City budget of R80 million for electricity upgrading in
the long term 2018-2030 (Deloitte, 2014). There are also opportunities for gas-to-power projects in and
around Atlantis. A site opposite the Ankerlig Power Station, an open cycle gas turbine plant, is currently
earmarked for the conversion of this diesel-based power generator to gas (1500 MW). If this conversion
is done, it will provide a more competitively priced electricity for the region and it will diversify the
energy mix for Atlantis and surrounds (Mulcahy and Rice, 2015).
In addition to its industrial infrastructure, Atlantis is ideally located near the industrial freight centre of
the Cape Town metropolitan area and linked to the freight movement networks. Improvements to road
infrastructure for heavier loads will be required costing around R8 million (Deloitte, 2014).
In collaboration with investment promotion institutions such as Wesgro and TISA, GreenCape has
developed a pipeline of potential investors. One of the efforts to support the pipeline development has
been the dti’s willingness to issue letters of support to potential investors prior to the SEZ designation to
commit to ensuring incentives for these companies, for such entities to benefit from the SEZ when it is
established in Atlantis. Establishing a SEZ for Atlantis will provide the necessary incentives and support
structure to realise this pipeline. The innovation in establishing ready-made sites is a very important
activity that aligns investor requirements with regional authorities’ ability to ensure the ease of doing
business. A SEZ ultimately builds on these types of efforts.
Other opportunities identified for Atlantis and surrounds include supporting other manufacturing
clusters, while maintaining a focusing on manufacturing for green economy. The SEZ could also be
designated more broadly spatially to include the West Coast economic growth corridor and
developments related to natural gas supply and the gas-to-power project for the ASEZ (Boschoff, 2015).
This lesson demonstrates the importance of creating an enabling environment for investors, not only
through financial incentives but also by ensuring the ease of doing business and investments support. In
the case of Atlantis, the spatial aspects of Atlantis were already advantageous. The innovation brought
in terms of land disposal is significant as it is a factor attracting further investment. As a tool for
industrial development, this ability to attract investors through the SEZ model is important and serves as
a key factor in promoting regional development.
4. 5 Socio-economic development: skills development
One of the key factors affecting the competitiveness of SEZs is the availability of a skilled work force. In
its report on SEZ development, the Centre for Development and Enterprise (CDE) comments that a large
factor of success lies in the economic fundamental which includes the labour market, arguing that “the
rest of the economy has to work” (CDE, 2012). Efforts by GreenCape to promote skills development
have resulted in the triple helix (academia/university-industry-government) collaboration in the
Western Cape to conduct a skills audit in Atlantis. In addition, the establishment of SARETEC will also
advance the skills development of the renewable energy sector in the country. The positioning of SEZs
near supporting training and academic institutions is vital in gaining the required support for skills
development in a region, especially for an emerging sector such as green technologies. It should be a
careful consideration in the geographic designation of SEZs. The innovative tool of a skills audit can be
very useful in informing the skills development plan for regional development in and around the SEZ and
is thus a tool not only for industrial development but also for social development. The issue of skills
development and the supporting environment are two major points of weakness in many other SEZs
under consideration (Cova Advisory, 2014).
The socio-economic profile of Atlantis is unlike that of other South African places. It displays an
advanced level of infrastructural progress and boasts the availability of a large labour force. Only 28. 5%
of adults above the age of 20 in Atlantis had, however, achieved their matric (finished schooling) by
2011. A further 4% had gone on to accumulate any other formal education. Furthermore, employment
of the working age population is only 73% (Census, 2013).
The Atlantis SEZ Project office worked with the Atlantis Industrial Initiative to better understand the
challenges faced by local businesses, particularly with labour related issues. Among the many challenges
Atlantis faces is the challenge of maintaining a work-ready and appropriately skilled work force to
support industrial development. Since the renewable energy sector is also a relatively new industry,
even globally, the skillsets required are still niche. To support the development of the renewable energy
sector in the country, the South African Renewable Energy Technology Centre has been established at
CPUT. It represents a significant investment of R105 million by the Department of Higher Education and
Training. The ASEZ Project Office has also sought to establish partnerships with tertiary institutions and
training colleges in the region. These include the Stellenbosch University's Centre for Renewable and
Sustainable Energy Studies and the UCT's Energy Research Centre. At both of these tertiary institutions,
there is a focus/specialisation in greentech research and the training of highly skilled greentech
engineers and technicians and researchers. West Coast FET colleges form part of this broader network
too. Lastly, GreenCape is the first African member of the International Cleantech Cluster Network. This
network of the world’s leading cleantech clusters.
A skills audit is valuable for the regional development of Atlantis. Many of the incentives and support
structures are focused on businesses in the area but the broader socio-economic development aspect of
the SEZ and its proposed offering to the region are just as important. One of the ways in which the ASEZ
will strengthen the sustainable development of the greentech sector is through a strategic approach to
skills development, based on a thorough assessment of the existing skills base. This lesson is certainly
replicable in other regions and should not be overlooked in considering the broader industry
requirements for developing sectors.
5. Conclusion: Reflecting on lessons from the development approach in Atlantis
Two of the 10 proposed SEZs for South Africa are green SEZs that will largely support manufacturing in
the renewable energy sector. This paper has explored the developments of one of these SEZs and
looked in particular at the innovations in the approach to regional development in Atlantis.
There are a number of benefits that SEZ designation brings to regional development in and around
Atlantis. The first is the coordination of current greentech ambitions around a longer-term incentive
programme. The SEZ will enable broader support to both existing and new industries in Atlantis. The
incentives and structure of the SEZ provides an overarching framework for longer term strategy and
support to this greentech hub. Lastly, the skills development component associated with the SEZ will
further strengthen and ensure the sustainable development of the zone.
SEZ instrument is a tool for industrial development that will serve as a coordinating mechanism,
enhancing the greentech ambitions of Atlantis. This instrument on its own however is not sufficient to
ensure sustainable and lasting regional development. From the case study, it is clear that national policy
on both the renewable energy sector and the green economy have been drivers of the broader market
dynamics to support industrial development for greentech in the region. There are a number of reasons
why the Atlantis SEZ is likely to succeed, based on sufficient greentech market demand, location and the
existing infrastructure of Atlantis and its ability to attract significant manufacturing investments such as
GRI. The lessons discussed reflect on initiatives at various levels of government, and are relevant and
replicable in other SEZs.
The innovations in the case of the ASEZ were driven at various levels, from national policy to
partnerships amongst stakeholders, to specific programmes designed to support businesses in Atlantis.
In many instances, the innovations are certainly replicable for other SEZs.
In summary, the five key lessons in the case of Atlantis are:
(1) At provincial level, the Green Economy strategy of the Western Cape Government serves as a strong
strategic planning tool to implement policies and projects to promote the green economy. It established
the rationale for greentech in Atlantis and provided the necessary linkage between the national green
economy agenda and the regional development approach for greentech. Replicable in all provinces,
such a green economy strategy must be based on market research and allow for an integrated approach
to green economy projects.
(2) Institutionally, the support for development of both green manufacturing and a green SEZ were
driven by a competent and proactive agency and partnerships. Identifying the right organisation to
develop and support SEZ designation must consider the capabilities, expertise and existing relationships
held by such entities.
(3) The economics and the business case of the industries supported in an industrial cluster are the
backbone of any SEZ designation. Understanding the market for green industries and assessing the
market size and opportunities for greentech provided the rationale for promoting the manufacturing of
greentech in the region.
(4) Attracting investors is not simply a case of financial incentives but understanding how to create an
enabling environment and working with the private sector in collaborative partnerships represents.
(5) SEZs need the appropriate labour and skills to support industrial development. In the green SEZs, in
particular, the triple helix collaboration to establish training institutions to match the skills needs is a
vital part of ensuring the long-term sustainability of industrial development.
Based on the lessons from Atlantis and the role of SEZ designation for the region, this paper has
explored some key criteria and innovations for regional development linked to the SEZ policy tool. As an
enhancement of the IDZ instrument, the SEZ approach is likely to be more focused in terms of sector
support as well as financing and governance structures.
As the designation of the ASEZ is still underway, a later assessment will be needed to measure the
performance of the SEZ in Atlantis. In addition, the development of the ASEZ has not been contrasted
with a detailed study of the proposed solar SEZ in Upington. A better understanding of the similarities
and difference in the development of these two green SEZ will deepen the analysis on this type of SEZ
development. Recommendations for further work in understanding the development of SEZs in South
Africa should focus on exploring the specific markets that these SEZs will be based on. The ultimate
objective of the SEZ model is to create regional industrial development spaces that attract competitive
businesses. Unpacking the value chains for the products and sectors for selected SEZs and
understanding the requirements of the businesses to target for these SEZs is crucial. Furthermore, based
on the finding of this study, it is also recommended that various operational models be considered to
understand which institutional arrangements and governance structures are best suited to specific types
of SEZs and in particular contexts.
The Atlantis case study in preparation of SEZ designation has demonstrated features of industrial
readiness and green economy strategy for the region that are unique to Atlantis. There are, however,
aspects of the Atlantis case that can be replicated by other SEZs. These include the land disposal process
and ability to attract investors to the region, which are founded on institutional collaboration and
innovation. Regional development through the SEZ model holds great potential for creating the
industrial linkages to promote economic growth and jobs creation and further work is needed to unpack
the key requirements and needs in specific regions to fully support the promotion of SEZs.
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Annex A: Policy alignment of the Green SEZ in Atlantis
National Green Economy Policy
Enshrined in the Constitution is the right to an environment that is not harmful; which is underpinned
by the economy National Environmental Management Act No. 107 of 1998 to promote environmental
sustainability. National planning and economic policies include the NDP and economic policy, and the
NGP. The Green Economy Accord emerging from the NGP as the overarching economic policy for the
transition to a green economy and this is supported by Department of Environmental Affairs’ National
Sustainable Development Strategy and white paper on climate change response. The Green Fund
(managed by the Development Bank of Southern Africa) was also established to support the transition
to the green economy and within the green economy framework there are a number of national
initiatives across sectors that support the green economy agenda. South Africa’s international
commitments to reduce emissions and respond to climate change are also captured alongside the
green economy policy.
Local Green Economy Policy
Building on the national policies for the green economy, the Western Cape Government has
developed its own green economy strategy, which is not limited only to manufacturing, but includes
areas such as tourism, as well as resource and ecosystem management. Market research underpins
the Smart Green Framework of the green economy strategy to develop the policies and projects and
the province has set specific budgets and institutional capacity for green economy work. Designation
of Atlantis as an SEZ is viewed as a logical extension to the province’s ongoing efforts to position itself
as Africa’s greentech manufacturing hub, as outlined in a recently published green economy strategy
framework. Jenny Cargill, special advisor to the WCG, explains that “the Atlantis SEZ is viewed as a
core component in attracting greentech investment into the province. It is also seen as the natural
next step in Atlantis’ own industrial evolution” (Creamer, 2014). The main objective for the Atlantis
SEZ is to grow the greentech sector in the Western Cape and to further the CoCT objectives of
revitalizing Atlantis as a key industrial node in the region.
National sector policies related to green ambitions: energy, industrial policy and local support
A number of other national sector policies aligned to and supporting the green economy include energy policy, industrial policy and innovation policy as well elements of spatial development frameworks. In energy policy, the Integrated Resource Plan and procurement of renewable energy through REIPPPP has a significant role to play in introducing renewable and cleaner energy for the country. The IRP allocates of generation capacity independent renewable energy providers in the energy mix and across four bidding rounds has assigned over 5 000 MW of renewable energy to over 77 projects. In April 2015, the Minister of Energy announced an increase in the allocation to renewable energy and announced plans for gas-to-power procurement through another IPP process. In the energy sector, at the local level, mmunicipalities also play a key role in advancing energy efficiency and promoting renewable energy. The City of Cape Town, for example, has pledged to depend on renewable energy for up to 10% of its power needs by 2020. Both at national and local level the targets set for renewable energy generation are key determinants in securing sufficient market for renewables.
The industrial policy supporting the green economy, involves support of green industries and other industrial incentives such as the Manufacturing Competitiveness Enhancement Programme (MCEP), 12I and 12 L programmes. The Industrial Policy Action Plan (2015/16) which gives expression to the
National Industrial Policy Framework is the annually updated action plan designed to support key sectors and industries in the country. There are a number of policies and incentives in the context of industrial policy that are relevant for Atlantis, in particular the current policy on special economic zones.
Local economic development policy and spatial planning
In addition, a localised policy push to develop Atlantis as a greentech hub took the form of the Atlantis Revitalization Framework. “In 2011 an intergovernmental technical task team (consisting of representatives of the CoCT, WCG and the national Department of Economic Development) developed a framework to promote the revitalisation of Atlantis. The initiative was in response to a severe socio-economic crisis in the area which had been exacerbated by the recent closure of several factories and loss of almost 900 jobs.” Establishing the greentech hub has been part of the City’s Atlantis Revitalization Framework and Atlantis has been identified as a focus area in the Cape Town Spatial Development Framework. Establishing a Green Manufacturing Hub forms part of this strategic intent as reflected in the City’s recently approved Integrated Development Plan. This is now integrated and part of the green economy strategy broadly. As the support for greentech in Atlantis is also focussed on technology transfer and innovation, the initiative is also linked to the national policy Innovation Plan established by the Department of Science and Technology.
Lastly, the developments in Atlantis speak to the broader theme of spatial planning, both at a national level and local level, supported by policies and programmes such as the Spatial Infrastructure Programmes and Spatial Land Use and Management Act No. 16 of 2013. The Presidential Infrastructure Coordinating Commission (PICC) was established to integrate and coordinate the long-term infrastructure build programmes across all three spheres of Government. Eighteen Strategic Integrated Projects (SIPs) have been developed and approved to support economic development and address service delivery in the poorest provinces. The SIPs cover a range of economic and social infrastructure. The focus of these SIPS is on localisation, job creation and skills development, research and technology development, stimulating the green economy and empowerment improvement. SIPS that are particularly relevant for the Western Cape and Atlantis include the Energy and Green Economy SIPS.
Source: Adapted from the Atlantis SEZ prefeasibility study, Deloitte 2014
Appendix B: The spatial and planning context of Atlantis
Draft Atlantis Revitalization Framework (2012)
The Atlantis Revitalization Framework articulates a constructive and meaningful working relationship
where responsibilities between the key stakeholders – government, business, and civil society – active in
Atlantis are agreed and shared, so as to enable successful implementation of strategies and actions for
the revitalization, growth and development of Atlantis. It is acknowledged that Atlantis is a significant
industrial node in the city and regional spatial economy; its long-term economic decline reduces the
impact that catalytic developments such as the Saldanha SEZ may have, reducing the region’s economic
competitiveness and long-term growth trajectory.
The Western Cape Infrastructure Framework
The Western Cape Infrastructure Framework aims to align the planning, delivery and management of
infrastructure provided by all stakeholders (national, provincial and local governments, state-owned
companies and the private sector) for the period to 2040. The relevance in particular to the ASEZ is that
the WCIF entails a future infrastructure investment approach of improved resource efficiency and less
carbon intensive energy. It promotes the development of renewable energy plants and associated
manufacturing capability, especially concentrated solar power.
The Western Cape Green Economy Framework (2013) – Green is Smart
This strategy specifically identifies where the Western Cape has the potential to be a pioneer and early
adopter of green technologies and economic activity. Green is Smart explicitly supports the selection of
Atlantis as a proposed SEZ with a focus on renewable energy and advanced manufacturing, and notes
the CoCT and WCG’s significant progress in making available land at competitive rates and with a
relatively easy land occupation process.
The Western Cape Broad Band Initiative
This partnership between the WCG and CoCT aims to implement an expansive fibre-optic communication network across the metro and will provide high-speed internet to 45 WGC and 130 CoCT buildings/ facilities. The intent is to enter into agreements with private service providers to make spare data capacity available to disadvantaged areas at a reduced fee. By September 2014, the learners of Delft and Atlantis will receive free Wi-Fi as part of the projects so that they can research their school projects on the web.
The Provincial Spatial Development Framework
This is a framework for the province’s urban and rural areas that gives spatial expression to the national
(i.e. NDP) and provincial development agendas and communicates government’s spatial development
intentions to the private sector and civil society. It explicitly supports the green sector. It supports
households accessing basic services that are delivered resource efficiently; the prudent use of land and
finite resources and safeguarding of ecosystems; energy diversification and energy efficiency to enable a
transition to a low carbon, sustainable energy future; and delinking economic growth from energy use.
CoCT Integrated Development Plan (2013/14 Review)
The Integrated Development Plan is the City’s key statutory medium-term strategic plan, also directing the budget. The IDP identifies three catalytic projects to support increased investment and jobs: Investment in broadband infrastructure across the city; the further roll-out of the MyCiti service as part of the Bus Rapid Transit network, especially to the south-east of the city; area revitalisation and investment in renewable energy, including the Atlantis Revitalization scheme and green-technology
cluster. The City has also set a target of generating 10% renewable energy by 2020. Atlantis related infrastructure/ public facility/ services investment: Upgrading of Dassenberg Drive; Atlantis substation 5 transformer replacement and Atlantis industrial main substation upgrade; support for the PRASA/ Metrorail investigation into the utilisation of the Atlantis goods rail line as a passenger line; and a major upgrade to the Atlantis cemetery.
CoCT Economic Growth Strategy
Cape Town Spatial Development Framework
Blaauwberg District Plan (Spatial Development Plan and Environmental Management Framework)
CoCT Integrated Transport Plan 2013-2018 (2013).
Koeberg Emergency Plan
Aimed at responsible development and risk/ disaster management related to the Koeberg Nuclear Power Station
Source: Deloitte Feasibility Study, 2015